Give your start up an 80/20 chance of success

Most things change each day for a startup, internally and externally. You’ve got to continually keep your antenna twitching and your radar on, being alert and mindful at all times. If one day you’re in a bad situation, don’t worry it’ll change. If you’re in a good situation the next day, don’t worry it’ll change too!

If your team has an agile mindset, your startup can be proactive, and never doubt that a small group of thoughtful, committed, people can change the world. Indeed, it is the only thing that ever has. The greatest danger in times of change is not the turbulence, but it is to act with yesterday’s logic, using the rear-view mirror for navigation.

I was minded of this just last week when the ONS rejigged their basket of goods that make up its consumer price index to calculate the rate of inflation. Ok, only me interested in economics news then, but bear with me! They take into consideration those items that are most popular in current demand to give a fair reflection of expenditure trends, and thus track what is driving price increases. The changes were illuminating.

Out went men’s suits – because of remote working I assume – single doughnuts – people now scoff them in packs, and presumably because of remote working and probably why men cannot fit into their suits? In came sports bras (covid effect on fashion?) and antibacterial wipes – because of sticky fingers after all those doughnuts and we bought them due to covid and haven’t stopped?

The ONS decisions are a good reminder that you need to look at the key drivers and issues and prioritise them, staying focused on what makes a difference and not get side tracked or distracted. Often we try to keep a view of everything in our sights, when in reality we should take note of the Pareto principle – the 80/20 rule.

Vilfredo Pareto was a philosopher, economist and academic, fascinated by statistics and trends. One day he noticed that 20% of the pea plants in his garden generated 80% of the healthy peapods. He took this observation into a study about wealth and income, discovering that 80% of the land in Italy was owned by 20% of the population. He then investigated different industries and found that 80% of production typically came from 20% of the companies, publishing a paper, Cours d’économie politique.

Sadly, Pareto didn’t live to see the appreciation and adoption of his principle, and it was left to Joseph Juran to suggest The Pareto Principle or the 80/20 rule, the law of the vital few, that states that for many events, 80% of the effects come from 20% of the causes – a minority has a disproportionate impact and share of results. Whilst there is nothing special about the number 80% mathematically, many phenomena empirically exhibit such a distribution. Check it out yourself: on my iPhone, I have 30 different mobile apps pinned to the tiles, but 80% of the time I’m only using six (20%). When I socialise, 80% of my time is spent with the same 20% of my friends.

Pareto’s Principle can be applied to the odds of success of everything you do in your startup: your odds of winning go up to 80% when you achieve the 20% outcomes that give you the results. That is great odds. Intuitively, we know this to be true, so how can you apply Pareto’s principle to focus on those things that matter in your startup and move the needle?

You’re faced with the constant challenge of limited resources. It’s not just your time you need to maximise, but your team’s capacity. Instead of trying to do the impossible, understand which projects, actions and activities are the most important, the ‘Vital Few’, to focus on. The 80/20 mindset helps you to stay focused on your North Star and execution, and spend less time chasing stuff which isn’t on the current roadmap.

The simple takeaway is this: stop beating yourself up on working harder and putting in longer hours. Most of what you’re spending time doing doesn’t matter, doesn’t have an impact, and that’s before we get onto the law of diminishing returns in terms of effectiveness on hours worked. Many startup founders I’ve discussed this with find it hard to accept this thinking, and the 80/20 rule can appear paradoxical, but we are architecting the future not measuring the past.

Our thinking is try to do everything. This needn’t be the reality. The opportunity cost of doing the 80% is often not doing the 20% of what really matters. Once you internalise this, you’ll focus on predicting the 20% instead of trying to get everything done, and always feeling you’re living on a hamster wheel and constantly behind. 

In fact, doing more and working hours does not necessarily increase the likelihood that your startup will succeed, it may decrease it if it makes your thinking narrow and clouds your judgment. You may be too focused on breadth of work and not depth of work. For example, consider a startup which directs its activities equally across its entire product base, when maybe 80% of customer traction derives from just 20% of the products. The decision-making would clearly signpost where to direct your efforts.

Most of us work five days a week, but in four of those days we’re only creating 20% of what we do in the week; there’s a single day buried in there when we create 80% of our output for that week. What if we could track that day down and make the rest of the week more like that day? According to the Pareto Principle you can do just that:

  • 80% of your work takes 20% of your time
  • 80% of your results come from just 20% of your effort
  • 80% of your revenue comes from just 20% of your products and customers.

Which 20% of your current efforts are resulting in 80% of your desired outcomes and happiness? Which 20% of your current efforts are causing 80% of your problems and unhappiness? This is a call to action for workaholics and procrastinators alike! Workaholics don’t actually accomplish more than non-workaholics. They may claim to be perfectionists, but that just means they’re wasting time fixating on inconsequential details instead of moving on to the next task. So, here are some thoughts on how to apply 80/20 thinking to your startup:

Hyperactivity vs. Productivity Being busy is not the same as being productive. Forget about the start-up overwork ethic that people wear as a badge of honour, you don’t scale! Get analytical and stay analytical, use 80/20 principles to stop putting out fires, duplicate your strong areas instead of trying to fix your weaknesses.

Everyone wears several hats in a startup, with overloaded schedules and too much to do, but getting stuff done does not have a linear relationship to doing the stuff that makes a difference. You already have all the time you’re going to get, and the law of diminishing returns applies – time is a bandit, and we often use extraordinary effort to keep things moving forward, but this is simply not sustainable.

Focus in outcomes and impact, not a jobs to do list. Recall the Covey Matrix, the four quadrants on how to manage your time and the urgent/important definition of work and settings priorities. Apply the 80/20 principle: what 20% of tasks are consuming 80% of your time?

Get intimate with ideal customers: focus on 20% of your target market Not all customers are created equal. Exit high-maintenance, low-profit customers on autopilot – their money isn’t worth your effort. Focus on the 20% of your customers that will grow your startup.

Likelihood is that 80% of your new customers buy 20% of your offerings. Therefore identify which offerings produce most new customers, and then use the identified offerings more often (and use the less-effective offerings less often, or not at all).  Get intimate with your offerings, and focus on the 20% that customers want.

Step out of the drama Drama is a diversion that keeps us busy and not moving forward, it absorbs all our attention such that we leave important tasks ignored or at best incomplete, resulting in our failure to push our startup to its fullest. Habitually, we create drama by dwelling in interminable thought loops, or continuing to participate in dead-end activities. We entangle our mind in a web of ultimately inconsequential details, clouding our long-range vision and side tracking our self-direction.

We additionally feed our self-perpetuating drama by projecting ourselves into future worst-case scenarios constructed from our assumptions. Being preoccupied by our drama makes it impossible to get centered. Get a focus and use the 80/20 rule to give yourself discipline.


Management by fire fighting can become the norm, but is ultimately unproductive and energy sapping. Urgency itself is not the problem. The Pareto Principle enables a startup founder to work ‘on’ the business, not just ‘in’ the business, providing visibility for thinking time and space to focus on priorities, to do the stuff that makes a difference. The reality is most of what we do doesn’t matter, so we need to change this and focus on the 20% that moves the needle.

Chaos should not be the natural state at work. Anxiety isn’t a prerequisite for progress. Keep things simple – leave the poetry in what you make. Equally, chose fulfilment ahead of crazy growth goals. Small is not just a stepping-stone. Small is a great destination itself. Build something of purpose, of intent. Growth can be a slow and steady climb. There is no hockey stick graph.

I am turned off by the super rapid growth companies. It’s not stable. Just look at oak trees. They grow slowly, but they have a solid foundation to withstand storms. They are majestic trees, and live long, which is why I’m advocate of consistent, steady growth. Do the 20% of your work that leads to 80% of your results. Prioritise the 20% of your network who provide 80% of your support and enjoyment. Fill your life with the 20% of your experiences that provide 80% of your happiness.

In a chronically leaking boat, energy devoted to changing vessels is more productive than energy devoted to patching leaks. Use the 80/20 rule to pick out the imbalance of effects, maximise the small and powerful 20% and reduce the wasteful 80%. Go on, give it a go.

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